The Telegraph
Since 1st March, 1999
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India breaks bread with G7

London, Feb. 5: P. Chidambaram and fellow finance ministers from two other developing countries, Brazil and South Africa, today accepted invitations from their colleagues from the G7 advanced nations to breakfast before the day's summit meeting in London.

Chidambaram did not hang around for dinner, however, and flew home.

The G7 club ' the US, Japan, Germany, Britain, France, Italy and Canada ' asked India, Brazil and South Africa for the first time this year. China was invited for a second time, while Russia has been attending the meetings for many years.

'I think the G7 recognises that there are important economies outside the G7 which are likely to emerge as economic powerhouses in the next 10 to 20 years,' Chidambaram told a news agency.

He said India will articulate the problems facing the G20 group of countries.

At present, the G7 countries account for 14 per cent of the world's population but two-thirds of its wealth. The G20 accounts for around two-thirds of world population and 90 per cent of the world gross domestic product.

Chidambaram explained: 'G20 wants market access, wants developed countries to abide by their obligations under the WTO.'

He added that the G20 wanted a discussion on capital flows, particularly hedge funds. 'These are some of the issues that we will try to highlight at the discussions,' he said.

The Brazilian finance minister, Antonio Palocci, has said he will lobby the G7 to include his own country as well as India and China as permanent participants in the meetings on global economy, not merely as special guests.

Chidambaram has been less pushy than his Brazilian counterpart in seeking permanent G7 membership.

An Indian source close to the talks said: 'Chidambaram's view is that this is the first time India has been invited. 'It's a good beginning, let's see how it goes.'

Meanwhile, Britain and the US have fallen out over the new Marshall plan proposed by Gordon Brown, the British Chancellor of the Exchequer, to help tackle poverty in the developing world, especially in Africa.

Brown wants to set up an International Finance Facility which would double overseas aid from rich countries to $100 billion a year.

Brown has received the support of the former South African president Nelson Mandela who is in London. But the US wants to deal directly with the countries on a bilateral basis since it believes this is a better way to achieve efficiency and reduce corruption.

Brown, however, will continue to argue that it is in America's own interest to promote stability in the developing world in order to counter the spread of extremism and international terrorism.

Most European nations are backing Brown and the disagreement is becoming Europe versus America.

EU trade commissioner Peter Mandelson, who recently visited Delhi, voiced disappointment at the American stance.

He said: 'Well, it's discouraging for all of us who support that proposal, which I do, but it doesn't mean to say that's the end of it, and just because the Americans choose not to sign up to it, it doesn't mean the rest of us shouldn't either.'

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